9/09/2010 @ 6:00PM

Economies Go Underground

This is the decade of the do-it-yourself city. Already more than 800 million people–almost one in seven inhabitants of the planet–live in shantytowns, often in tar-paper shacks without water, sewers or electricity. There’s no government, no Donald Trump or other real estate mogul anywhere on the globe with the means or desire to build enough homes to make these communities disappear. Instead they will grow by 16,000 people per day, the U.N. has projected in its “State of the World’s Cities 2010/2011″ report, to hit a total of 889 million in 2020.

Similarly more than half the workers of the world–or 1.8 billion people–now earn their wages in unauthorized street markets and other businesses that are not registered, not licensed and not counted in official employment statistics. The number of people in these firms will grow to two-thirds of the global workforce by 2020, according to The Organisation for Economic Co-operation and Development, a think tank devoted to fostering free market institutions. There’s no government, no Daddy Warbucks, no corporate conglomerate that can rival this scale of job creation.

So the future belongs to the people in the world’s sprawling shantytowns and burgeoning street markets. Over the coming decade, squatters and informal businesses will key their own economic advancement.

Shack dwellers in South Africa are pushing a new community empowerment agenda. The first step: legal access to electricity, because overturned candles and kerosene lanterns have caused many deadly fires. Then, self-determination and development. “The house on its own cannot solve the problem,” says S’bu Zikode, who lives in Durban’s Kennedy Road shack settlement and is president of Abahlali baseMjondolo, a squatter organization. “It’s not only money that creates dignity. All governments should accept that our communities are part of the greater society.”

Three thousand miles north, in Lagos, Nigeria, the street markets are like a swap meet on steroids. At Alaba International Market, porters carry stacks of stereos on their heads, barefoot haulers pull handcarts piled high with high-definition flat-panel TVs, and vendors hawk the latest cellphones and accessories from stalls fashioned out of sticks and twine. The better businesses are in pockmarked concrete structures topped with rusting sprouts of rebar. In muddy lots at the rear of the market, workers rake the moldering bric-a-brac of outdated electronics into piles and set them ablaze.

Sitting in his air-conditioned showroom, James Ezeifeoma laughs at the cacophony. He doesn’t extol the disorder, but says it takes time to harness growth. Twenty years back, Ezeifeoma’s business was a crude kiosk in the bush. Today his firm is one of the largest importers of name-brand electronics in West Africa. “Because our market is haphazard and informal, people think we are criminal,” he says. “But we play a very big role in the global economy.”

In the U.S. and Europe, too, street businesses will scale up through the decade. Though the mainstream economy will continue to stagnate through 2015, these moonlighting operations will emerge as a powerful economic engine, helping people survive and thrive during the economic turmoil.

By the start of the 2020s the combined economic might of the world’s quasi-legal, DIY businesses and communities will rival the total economic output of the United States, and they will represent our planet’s best hope for egalitarian growth and sustainable economic development.